Carmen Segarra filed a lawsuit against the New York Fed and three of its employees alleging she had been wrongfully terminated last year after she determined that Goldman Sachs had insufficient conflict-of-interest policies.

What was Timothy Geithner thinking back in 2008 when, as president of the New York Fed, he decided to give Goldman Sachs a $30 billion interest-free loan as part of an $80 billion secret float to favored banks? The sordid details of that program were finally made public this week in response to a court order for a Freedom of Information Act release, thanks to a Bloomberg News lawsuit.

Critics of the financial chop shop, of which there are many, would like to see Goldman Sachs return billions in taxpayer dollars paid out to cover a $20 million bet. The huge payout was passed through AIG, orchestrated by then-Chairman Timothy Geithner’s New York Fed, and publicized by the Financial Crisis Inquiry Commission.

Two years into the Obama presidency and the economic data is still looking grim. Don’t be fooled by the gyrations of the stock market, where optimism is mostly a reflection of the ability of financial corporations—thanks to massive government largesse—to survive the mess they created.

Forget that business with the maid whose work papers expired. The real scandal with Timothy Geithner, Barack Obama’s choice to head the Treasury Department, is his history of lax regulation—at least where his friends at Citigroup were concerned. ProPublica did some digging and found that Geithner’s New York Fed “eased the reins as the company blew billions. ...”

Friday brought more news from purportedly reliable sources close to Barack Obama, this time suggesting that the president-elect was zeroing in on Timothy Geithner as his pick for treasury secretary and New Mexico Gov. Bill Richardson for commerce secretary.